Speeches, 7/2/2012

Statement by Minister Tuomioja at The United Nations Economic and Social Council (ECOSOC)

Statement by Minister Tuomioja at The United Nations Economical and Social Council. Photo: MFA Finland

Statement by Erkki Tuomioja, the minister for Foreign Affairs of Finland, at the The United Nations Economic and Social Council (ECOSOC) Substantive Session – High-level Segment in New York, on July 2, 2012.

Mr. President
Mr. Secretary General
Heads of State and Government
Distinguished Ministers
Excellencies
Ladies and Gentleman

It is my great pleasure to speak here today on behalf of the President of Finland, Mr. Sauli Niinistö, who regrets that he could not be before this distinguished audience.

The theme of the 2012 ECOSOC Annual Ministerial Review – Productive capacity, employment and decent work– is utmost topical. We all know the multifaceted crises that the international and national economic systems have recently been confronted with. The financial and economic downturns have increased global unemployment, affecting specially the young people and women entering the labor markets. The number of people in vulnerable employment has increased globally. The quality of jobs has deteriorated. The reports of the Secretary-General to the Economic and Social Council present some of these developments and their consequences in a lucid and analytical way.

We need to secure strong and balanced economic growth, but growth alone is not enough. It should generate development within the boundaries of nature’s carrying capacity. We are facing several environmental crises – global warming, the loss of biodiversity, the depletion of natural resources, just to mention a few. They all stem from the current growth model’s inability to respect the boundaries of nature.

With ongoing climate change, the accelerating loss of biodiversity and current other changes we may, at best, have only a few decades time to reach ecologically, socially and economically sustainable development. No-one can be certain that we can do this, or even if it is possible at all.

RIO & Green economy

These issues were addressed in the Rio +20 conference. We have to acknowledge that while in Rio we made significant advances and reiterated important commitments, we also left a great deal of work to be completed later. Therefore, the follow-up to this conference is vital.

One of the main results of Rio was the decision on the Sustainable Development Goals. These goals have the potential to bring sustainable development genuinely to the core of the broader UN policy. Therefore, it is vitally important that we see the SDG process as an essential part of the larger post 2015 framework. In future, the ownership of the SDGs is important to ensure that each and every one of us will strive towards the targets that are to be set. In order to realize that ownership, we need to involve all stakeholders – public and private sectors, different organizations and civil society. I trust that the process now to be launched to define the SDGs will be efficient and results-oriented.

I am pleased that in Rio the Economic and Social Council´s key role in achieving a balanced integration of the three dimensions of sustainable development was recognized. We are – and have been before – committed to the strengthening of ECOSOC. We look forward to a truly open, transparent and inclusive process to establish the high-level political forum mentioned in the RIO outcome document. There are still various options regarding its position in the UN system, as well as its functions and tasks. However, the solution must ensure that sustainable development gets the political attention it deserves.

The European Union has actively been advocating the concept of “green economy”. By this we mean an economic system that aims at strengthening human well-being and social equality. It is compatible with the sustainable use of natural resources and acknowledges the carrying capacity of nature, as well as secures the provision of ecosystem services. Green economy addresses the unsustainable patterns of production and consumption.

In our mind, the green economy is low-carbon, resource-efficient and socially inclusive. As such, we do not find it to be at odds with economic growth. In contrast, we consider it to be a prerequisite for sustained, balanced growth and creation of productive capacities.

Bringing about green economy requires tailoring national inclusive strategies to the specific circumstances of each country, promoting efficient and sustainable decision-making by policymakers, consumers and the private sector, as well as provision of capital especially for small and medium size enterprises through a variety of financing tools.

The green economy is not contradictory to our development and social agendas. As the success of the so-called Nordic model shows it is not only possible to have a strong and comprehensive social welfare model combined with ecological responsibility and economic competitiveness, but that it is our inclusive social model which is the key to any Nordic successes.

Inclusive growth

Economic growth should create equal possibilities for all to participate in the society and to acquire decent employment. Currently the world economy is not able to create a sufficient number of decent employment opportunities; according to ILO, the global unemployment will increase from the current 200 million to 206 million during the next four years. This means six million people more without adequate employment. Already now, more than one third of the unemployed are young people and more than 40 % are women. For many people, working is rather a fight for survival than engaging in actual productive activities - the current economy and its growth model can definitely not be described as inclusive!

A significant proportion of the poor people living in developing countries are self-employed in the informal sector. They should be given decent jobs or a chance to participate in entrepreneurial activities that have potential for growth and creation of prosperity and well-being. This, we believe, is crucial for sustainable eradication of poverty.

Economic and social inequality and exclusion prevent development worldwide. Support is therefore needed for policies that increase equal opportunities for social, economic and political participation, as well as access to basic services. Economic policies must reduce inequality and pursue justice. While working towards these goals it is important not to forget the vital importance of private sector development and – for that – to acknowledge the environment.

Social protection floors

In the wealthiest and most well-off societies of this world, poverty has not been reduced through specific projects targeted at some vulnerable groups. On the contrary, it has been reduced through comprehensive pro-equity and pro-growth economic and social policies. Progressive taxation, public services and social protection have been established as permanent social institutions with a strong capacity to sustainably reduce poverty and inequality.

Basic social protection can be regarded as an economic and social necessity for employment and entrepreneurship. It is not a cost but an investment in people. It can empower people to adjust to changes in the economy and labor market. During economic shocks, social protection can act as an automatic social and economic stabilizer, stimulate aggregate demand and smoothen the transition back to a more sustainable economy.

Investments

Investment is crucial for achieving our goals, but for investment to meet our expectations, we need clearer and more transparent rules for foreign investment. In the absence of a global agreement, we have seen an immense proliferation of bilateral investment agreements. It is our firm belief that an agreement negotiated with full participation of the developing countries, with the right balance safeguarding the rights of governments and taking proper account of the need to ensure respect for environmental, consumer and labor standards as well as corporate social responsibility is still very much needed. In this respect we welcome the ongoing work in the OECD and UNCTAD.

A better and comprehensive agreement could also facilitate the creation of public–private partnerships (PPP) for investments, which areof paramount importance for the establishment of a green economy; we all know how scarce the fiscal resources of governments are in these days. Participation in the green economy and green investments has to be made attractive for the private sector.

Good governance & conducive environment for private sector.

Economic growth and activity, creation of productive capacities and decent jobs, are also profoundly linked to the rule of law. The rule of law fosters an enabling environment for economic growth. Predictable legal frameworks provide a good basis for entrepreneurship and business. Legislation should also be effectively implemented, so that businesses do not have to struggle with corruption or arbitrary treatment.

Legal frameworks ensure that labor rights and the right to decent work are protected. They support employment in a sustainable way. A predictable and stable environment is attractive for both domestic and foreign investors. Naturally, it is important to remember that the rule of law and human rights should be respected also by the businesses themselves.

One of the central features of the so called Nordic model is the cooperative spirit of the modern labour market. It has been based on the free right to organize and the understanding that everyone has more to gain through cooperation and agreement. In the Nordic model it is common for the labour market parties to negotiate and make agreements not only on wages and conditions of work, but more broadly about pensions, unemployment benefits and other social policies.

The past years have put women’s rights into the spotlight in many places. Women’s equal participation is needed for achieving common goals and sustainable development and for the full enjoyment of their human rights. Society can progress in a more positive and democratic direction when the competence, knowledge, experience and values of both women and men are allowed to influence and enrich political and economical decision-making processes.

LDCs

There have been remarkable changes in the global economy during the last decades. Hundreds of millions of people have been lifted from poverty. Quality of life has improved significantly, and there have been major advancements in technology that have radically changed the way people live, communicate, consume and organize themselves.

Simultaneously, however, the absolute number of people living in poverty has increased. Though majority of them nowadays live in middle-income countries, the fate of those living in the least developed countries still needs our attention and concern.

Least developed countries suffer from low average productivity and limited productive capacities. Their ability to produce efficiently and effectively and to diversify their economies is limited, leading in many cases to weak export and economic performance and modest employment generation. At the time of major global crises their economies are the most vulnerable. In wealthier countries, we may have to tighten our belts during the times of constraints. For a poor person living in a poor country, the repercussions of hick-ups in the world’s financial centers may be fatal.

I would like to remind us all that in Istanbul last year the Programme of Action for Least Developed Countries was adopted, based on the priorities set by the LDCs themselves: focus on productive capacity development, infrastructure, energy, science and technology, private sector development as well as agriculture and food security. We also agreed on an ambitious goal to enable half of the LDCs to meet the criteria for graduation during the decade of 2011 to 2020.

The least developed countries need the increasing of productivity and structural transition to more modern activities, to sustain growth, and thus reduction of poverty. They need enhanced technical and financial support, particularly in the view of transition to the green economy.

***

Mr President,

In this era of global interdependence, the time for economic, social or environmental mercantilism is over. No country can isolate itself from global developments. We share the common fate and have common interests.

I therefore fully agree with the recommendations of the Secretary-General in his report to Economic and Social Council: Global action is needed to coordinate policies aiming at increased productive capacities and strengthening the global economy. Structural changes have to be made by all governments. And this global economy of ours has to stand on a sustainable basis: we need policies and measures that acknowledge the social equality and justice as well as the boundaries of our common environment.

A well-functioning and efficient United Nations development system is a crucial part in promoting sustainable development on a global scale. In Tirana last week, the Delivering as One pilot countries and self-starters, supported by development partners, expressed strong leadership and commitment to take forward UN reform and system-wide coherence. We call on the UN system to fully embrace and drive these reforms. All parties need to work together to build on what has been achieved so far and take action where needed, to make sure that the UN can continue to deliver maximum development results on the ground.